The following is a statement from Chuck Moran, Executive Director of the Pennsylvania Licensed Beverage and Tavern Association (PaTaverns), regarding today’s announcement from the Pennsylvania Liquor Control Board concerning Darrell Clarke being named its new chair.

Today, Governor Josh Shapiro announced that Darrell Clarke has been named the new chair of the Pennsylvania Liquor Control Board (PLCB), replacing Tim Holden, who recently retired at the end of his term.

The Pennsylvania Licensed Beverage and Tavern Association (PaTaverns) congratulates Mr. Clarke on his new role at the PLCB, and also wishes Mr. Holden the very best.

PaTaverns has had a solid relationship with the PLCB through Mr. Holden’s leadership, and we look forward to the same type of relationship as Mr. Clarke takes over. Already, we’ve worked directly with Mr. Clarke through the Stop-and-Go Legislative Task Force during a hearing that he led. You can read my testimony in front of Mr. Clarke’s task force by clicking here.

Our Association advocates for best practices and rights within the industry as well as best experiences for patrons of our Member establishments. We know Mr. Clarke is a proven leader and a skilled statesman. We fully believe he will provide the right leadership to industry oversight, offering fairness and balance in decision making while helping to safely advance Pennsylvania’s licensed establishments.

PaTaverns looks forward to working with Mr. Clarke and his team at the PLCB.

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The Pennsylvania Licensed Beverage and Tavern Association is the statewide political voice for small business taverns and licensed restaurants. Based in Harrisburg, the Association formed after Prohibition in 1941, reorganized in 2019, and today advocates for best practices and rights within the industry as well as best experiences for patrons. To learn more, visit www.pataverns.com or follow the Association on Twitter via @TavernPA.

Chuck Moran, Executive Director

Provided by Chuck Moran, Executive Director
Pennsylvania Licensed Beverage and Tavern Association
On July 16, 2024
In front of the Stop-and-Go Legislative Task Force

Senator Williams. Members of the Stop-and-Go Legislative Task Force, thank you for inviting the Pennsylvania Licensed Beverage and Tavern Association to provide testimony on a concerning issue for the City of Philadelphia. That issue is what we all know as “Stop and Go’s.” We commend the chair and members for taking this problem seriously and working to do something to take state action to get these places under control, and closed where appropriate.

The PLBTA, often just called the Pennsylvania Tavern Association, represents Pennsylvania’s small business, family-owned taverns, bars, and licensed restaurants, and have Philadelphia members in neighborhoods from Eastwick to Somerton and in between. Part of our mission is education and training for members to help them run the most efficient, legal and safe establishments possible. We take that mission seriously.

Thankfully, we can’t say that we see Stop and Go types of businesses across the state. In fact, we only hear complaints in Philadelphia. And, in a nutshell, these are businesses, often a convenience store or deli, that somehow found a way to qualify for and purchase a liquor license.

As you know, having 300 square feet of “serving space,” food prep on site and seating and chairs for 30 people are the minimum requirements for an E license to sell beer and malt beverages. That by itself isn’t a problem. Across Pennsylvania there are convenience stores like Sheetz and Rutters that have liquor licenses, are not problematic, and run respectable businesses.

The establishments that we are talking about today often do not meet all of these requirements to hold either an E or an R liquor license – such as the seating – are sometimes associated with crime, and simply put are nuisances to the community. Furthermore, it’s not unusual to find health and safety issues within the business despite the requirement that they have current and valid health licenses.

Frankly, the negative things happening inside and outside these establishments act like a magnet to bring the wrong crowds.

All of that makes any honest licensee scratch their head and wonder why these businesses are allowed to operate … either with our without a liquor license.

The Pennsylvania Licensed Beverage and Tavern Association is concerned that these problematic businesses are giving all of us a black eye. And, we want them stopped.

But, as this committee knows, we are not the PLCB. We are not Liquor Control Enforcement. So, we can’t take their licenses away. That has to be done through others. And, in defense of the PLCB and LCE, they sometimes have their hands tied due to state laws and procedures that they must follow.

However, we can reaffirm our promise to you, Chairman, to work with you and help you lobby for changes in the liquor code that make sense, clean up Philadelphia, and don’t cause collateral damage to honest establishments across the state.

But let me add that this issue clearly goes beyond the liquor code. And changes to the liquor code by themselves won’t be the remedy to fix it. You can easily track this issue via Google back at least 8 years. During that time span, you can see the discussions and efforts taken to fix it.

We believe that resolving this issue will require looking at other aspects within the City neighborhoods that contribute to the problem. Community health, crime, and illegal drugs are some things to consider within the conversation. Likely, a true solution will also involve Philadelphia local policing as well as community health and treatment options may also be part of the solution.

Let’s face facts … today, the PLCB already has special arrangements with the City of Philadelphia for police patrols at the state’s liquor stores. The PLCB pays a lot of money for this arrangement with the local police. We all know that state stores only sell liquor to go. Yet, they appear worried about potential crime. Possibly those police patrols are key.

With all that said, as an Association, outside of lobbying for change, there is one other thing we can do immediately to help you. We don’t want these businesses as Members of our Association. We would invite you to provide a list of such establishments that we can use when we review member applications.

Again, we thank you for inviting the Tavern Association to be a part of the conversation on this important matter, and we renew our pledge to continue working with the Task Force, the General Assembly and the PLCB to get action directed to stopping the problems associated with these Stop-And-Go’s.

Howard Beck

By Howard Beck, CPCU, AU
Chief Underwriting Officer
Illinois Casualty Company

The liquor liability line of the insurance business has always been difficult.  Many carriers are reluctant to offer this product and even fewer are willing to make a commitment to it.  Since COVID, plaintiff’s attorneys have become increasingly creative and aggressive while juries cooperate with head scratching awards.  This combination of factors has caused a few traditional liquor liability carriers to withdraw from certain states or from offering liquor liability insurance completely.  The situation has reached a point in some states where bar owners are closing their doors because they can’t obtain insurance or afford the limited options that are available (e.g., South Carolina).

As the challenges increase across the country, license holders grow increasingly frustrated and feel that the situation is totally out of their control.  They actually have more control than they think if they are willing to view risk management differently.  With this mindset, they can control, and even lower, their liquor liability insurance premiums.

So, what does this mean for you, your employees, and your business? Here are some considerations on how to take control of your liquor liability insurance costs.

We work in an industry where people drink and often drive.  Sometimes those customers get into accidents, and innocent people get hurt.  When that happens, the insurance company takes over, investigates, applies the policy to the law, and strives for the most favorable financial outcome.

The best way to control the cost of liquor liability insurance is to do everything possible to prevent claims.

The next best way is to do everything possible to enable the insurance company to defend you.

How do you minimize the chance of a liquor liability claim?

• Make a true commitment to responsible serving!
• Train your staff repeatedly and consistently.
• Create a culture among your staff to recognize signs of intoxication and collectively cut off service effectively.

If there is a claim, how can you help the insurance company defend you?

• Invest in security cameras and long-term storage of recorded images.
  • Plaintiff’s attorneys will paint a very different picture of what happened.
  • Video doesn’t lie.
• Have documented procedures in place that detail your commitment to training your staff and not over-serving customers.
• Have a reputation for running a good business.

Recently, ICC settled a claim involving a patron who slipped on the stairs and faceplanted in the landscaping, suffering a broken nose and some broken fingers.  The establishment was sued for negligence. The patron claimed that the stairs were unsafe and demanded $150,000 as compensation for his injuries.

Fortunately, the business saved a video recording of the incident, which showed the patron fumbling in his pocket for his keys and failing to watch where he was walking.  Prior to trial, the case was settled for less than 10% of the demand.  Having recorded images of the incident made a huge difference in the negotiations, final settlement, as well as the claims history for the insured.

Plaintiff’s attorneys go after the easy money.  Businesses that don’t make these commitments are the desired target.  Avoid the claims, but if you have one, do everything possible for the insurance carrier to properly defend you and minimize the impact.

There are resources available to you through ICC or the Pennsylvania Licensed Beverage & Tavern Association.  We are here to help. Contact the Association or your agent for more information.

Editor’s Note: Illinois Casualty Company is the exclusive preferred vendor for liquor and business liability insurances. Qualifying Members can save up to 10% on their businessowners and liquor liability insurance. To find out more about these insurance programs and to locate an agent in your area, visit www.ilcasco.com/insurance-programs.

The following testimony was provided on March 26, 2024, by Jim DeLisio in front of the Pennsylvania House Republican Policy Committee. Mr. DeLisio is vice president of the Pennsylvania Licensed Beverage and Tavern Association and president of the York County Tavern Association. He is the owner of the Race Horse Tavern in Thomasville, Pa.

Chairman Kail, Representative Diamond, members of the Committee, good morning. I’m Jim DeLisio, owner of the Race Horse Tavern in Thomasville, York County. I’m also Vice President of the Pennsylvania Licensed Beverage and Tavern Association as well as President of the York County Tavern Association.

With me is Chuck Moran, executive director of the Pennsylvania Licensed Beverage and Tavern Association. Chuck will be available to help answer questions afterwards.

Let me begin by thanking you for inviting the Pennsylvania Licensed Beverage and Tavern Association to testify today. In the past I’ve enjoyed speaking with this committee on other issues so I’m humbled to be invited back.

Today, we’ll be talking about gaming in taverns with an emphasis on skill games. Gaming in general is a topic that I’ve testified in front of other committees in recent years, and I want everyone here to know that my establishment is one of a few Pennsylvania bars that has an active tavern gaming license. In fact, a license search conducted on March 11, 2024, shows there are only 39 of us with one.

For the sake of comparison, the most recent annual report from the PLCB shows there are slightly more than 11,200 R and H licensees in the state that could be eligible for a tavern gaming license. If you do the math, that’s about one-third of one percent.

As background, the Pennsylvania Licensed Beverage and Tavern Association was established in 1941 and today represents small business bars, taverns, and licensed restaurants throughout the state. Our perspective comes from the so-called “mom-and-pop” businesses that own either an R, H, or E liquor license. For the most part, we are your local bars, taverns, pubs, and licensed restaurants. We do not actively recruit large chains, grocery stores, or convenience stores that have R licenses.

Based on past Membership studies, about 63 percent of our member’s business is alcohol sales and 37% of sales are from food. Our average member employs about 16 individuals including the owner and family members. They serve less than 4,000 customers every month. If you count the chairs and barstools, throughout my Member establishments, you’ll find less than 100 per establishment.

The Tavern Association has a general position on gaming. We believe our Members should be allowed to offer legal forms of gaming in their establishments to entertain their patrons. That extends from tavern gaming to any other forms of gambling, including VGTs and video skill games.

As you know, small business bars have been hit hard for about the past 8 years. Our financial struggles began in 2017 when Act 166 of 2016 officially went into effect. That act stole an exclusive right that bar owners had … the right to sell six-packs and growlers to go. Act 166 gave beer distributors the right to sell to consumers any amount including amounts below a case down to a growler.

That in combination with other alcohol sale changes through Act 39 drove a stake through the heart of small business bars. Our membership studies show that during that time, 85 percent of our Members saw a decrease in beer sales. And, 30 percent of our Members saw a decrease between 11 and 20 percent. That adds up to thousands of dollars in lost revenue.

Clearly, small business bars became collateral damage of Acts 39 and 166.

We know that was not the intent of the legislature when it passed those bills and Governor Wolf signed them into law. But, you need to know that past legislative actions seriously damaged many small business bars across the state and we hope to work with you to correct the situation.

With revenue dropping as a result of those Acts, bar owners began to look at other options to fill their income void and stay profitable. Bars were locked out of the opportunity to have VGTs in their establishments when truck stops got them. So VGTs were not a legal option, although we wish they were.

That’s when video skill gaming entered the picture – and at least for now, court decisions have declared them not to be slot machines.

I can’t tell you how many skill games are in Pennsylvania bars at this time. That data is not something we collect. Businesses that sell and distribute skill games should have data on how many they’ve put into Pennsylvania.

But I can tell you based upon conversations I’ve had with colleagues at other establishments and across the state, skill games filled at least part of the void. Those with skill games are using the profits to pay bills, upgrade establishments to compete with newer license types, or offer benefits to employees.

We certainly hope this legislature will take action soon to finally put to bed the debate on whether or not skill games are legal, and whether skill games and VGTs should be in Pennsylvania bars. We do, however, need to remember lessons from the past including those from tavern gaming and the current situation with skill games.

First, tavern gaming did not take off and the state did not generate the revenue that it had projected. As mentioned earlier a shockingly low number of licensed establishments chose to offer tavern gaming. Why? There’s little profit after taxes and payment of supplies. I can talk more about that during the Q&A.

Any legislation that you would write to allow skill games and VGTs in bars would need to be careful not to carry a high tax. Also there can’t be a small cut for the bars.

Second, the current distribution of skill games is questionable. Unlike VGTs in truck stops that are regulated and monitored, skill game distributors have put their machines in locations that are easily accessible to anyone including minors.

There are also issues related to security and safety of some locations where these machines have been placed. You probably saw recent news articles out of Philadelphia that indicate the city has taken initial steps to ban skill games. Apparently, players have been robbed after winning.

I’ll conclude by thanking you for the opportunity to represent small business bars, taverns and licensed restaurants today. Chuck and I will be happy to answer any questions you may have at this time and in the future.

By Tawnya Dinh
Property Claims Representative
Illinois Casualty Company

In this industry, we are always amazed at the new methods criminals can devise to steal money! Recently, I handled an interesting claim that involved employee theft.

The employer’s POS machine had a tab called “On Account” that was not utilized by the business in its regular operations. An employee figured out that they could purchase gift cards “On Account”, then use those gift cards to pay for a customer’s cash order and pocket the cash.

The theft went on for many months and resulted in over $35,000 in stolen funds.

Interestingly, the theft was not detected by the business but was unveiled by the employee, who could not help but brag to a friend who also knew someone at the business. The employee was confronted and eventually confessed.

The business owner was unaware of the “On Account” tab. Once the employee’s theft was discovered, the owner immediately contacted their POS vendor to have the tab removed.

The employee turned out to have a lengthy history of prior criminal activity. This history went undiscovered due to a lack of background checks completed by the business. Unfortunately for the business owner, the Employee Dishonesty limit was insufficient to cover the extent of the theft.

In addition to the importance of having a full understanding of the components of the POS machine, this claim highlights how important it is to conduct background checks as part of your hiring process. With the current labor shortage, it may seem necessary to skip this step and get positions filled. Doing so could cost you and your business a lot more in the end.

Editor’s Note: Illinois Casualty Company is the exclusive preferred vendor of the Pennsylvania Licensed Beverage and Tavern Association for liquor liability insurance. Learn more about ICC by clicking here.